Changes in relative prices create substitution effects
a. True
b. False
Indicate whether the statement is true or false
True
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Refer to above figure. The loss of Consumer Surplus due to the tariff equals ________
Fill in the blank(s) with correct word
According to the monetarist view, the
a. IS schedule is quite flat; hence, reflecting a high interest elasticity of aggregate demand. b. IS schedule is quite steep; hence, reflecting a high interest elasticity of aggregate demand. c. LM schedule is quite flat; hence, reflecting a high interest elasticity of money demand. d. IS schedule is almost vertical; hence, reflecting a very low interest elasticity of money demand.
Which of the following defines the "store of value" function of money?
a. A common measurement of the relative value of different goods and services. b. The ability of money to hold value over time. c. That the materials used to manufacture money are of medium grade or quality, so that people will not hoard money for its commodity value. d. That money is widely accepted in exchange for goods and services.
The aggregate demand curve shifts to the right if
a) the government decreased welfare programs b) the Fed decreased the reserve requirement c) the government raised taxes d) the demand for money increased e) none of the above shifts the aggregate demand curve to the right